Explained: How MGNREGS scheme could soon resume in West Bengal, and why it was paused

Before the Centre suspended the MG-NREGS in 2022, West Bengal was among the top states — 51 to 80 lakh families in the state availed it annually between 2014-15 and 2021-22.

In its decision, the apex court dismissed the Central government’s plea, which challenged the Calcutta High Court’s order to resume the scheme from August 1, 2025. Here is what prompted the legal case, and what has to be done for the resumption.

Why was MGREGS paused in West Bengal?

The Centre had stopped the release of funds to West Bengal with effect from March 9, 2022, “due to non-compliance of directives of Central Government”, by invoking Section 27 of the MGNREGA, 2005. Since then, no work under the NREGS has happened in the state.

Minister of State of Rural Development, Kamlesh Paswan, said in a written reply to the Lok Sabha this year, “In case of the State of West Bengal, based on central teams’ inspection reports highlighting the implementation issues such as financial misappropriation, execution of non-permissible activities, splitting of works, lack of transparency & accountability, the Ministry had sent several communications to the State for rectification of the same. However, no noticeable improvements were observed.”

The TMC-led West Bengal government repeatedly urged the Union Ministry of Rural Development to resume the scheme. TMC MPs also raised the issue, with Abhishek Banerjee leading a delegation of MPs to Krishi Bhawan in New Delhi on more than one occasion.

Eventually, the West Bengal government approached the Calcutta High Court, which, in its order on June 18, 2025, directed that the “scheme be implemented prospectively with effect from 1st August 2025.” However, the Centre filed a plea in the Supreme Court on July 31, a day before the HC’s deadline, challenging the HC order.

On Monday, when the matter came up before the bench of Justices Vikram Nath and Sandeep Mehta, it refused to entertain the plea filed by the Centre against the HC order, saying it did not warrant interference.

Will the scheme immediately be resumed?

With the SC dismissing the Centre’s plea, sources said the ministry has virtually no option but to resume the scheme.

Given the previous resistance to the resumption, the SC’s decision is a big setback for the MoRD, headed by Shivraj Singh Chouhan. Before the Centre challenged the Calcutta HC order, Chouhan informed the Lok Sabha on July 22 that the decision was being “studied” to decide “further course of action”.

Months after taking charge as the Rural Development Minister, Chouhan had told reporters on December 4 last year that West Bengal was asked to fulfil some compliances, after which they would consider releasing funds for the NREGS and the Pradhan Mantri Gramin Awas Yojana (PMAY-G). While not directly related to this case, the Centre also stopped funding for the PMAY-G in West Bengal in 2022, alleging massive corruption in its implementation (among other things).

In January this year, West Bengal’s Rural Development Minister Pradip K Mazumdar wrote to Chouhan, seeking a meeting to ask for the release of funds. That meeting has not happened to date. While the MoRD has not officially reacted to the SC’s dismissal, it is learnt that the ministry may now move forward to complete the procedural requirements for resumption of the NREGS in the state.

What is the procedural requirement?

Sources say that the first step is to clear the labour budget of West Bengal, which is necessary for the operation of the NREGS, and the state has approached the MoRD for it.

The labour budget refers to the anticipated demand for unskilled manual work for the execution of a list of work identified to be taken up during a financial year. It is approved by the Empowered Committee headed by the Union Rural Development Secretary.

Data on the NREGS portal shows that the number of households working through the rural job guarantee scheme stood at 51 lakh in 2014-15, 61 lakh in 2015-16, 58 lakh in 2016-17, 52 lakh in 2017-18, 43.89 lakh in 2018-19, 54.57 lakh in 2019-20, 79.64 lakh in 2020-21, and 75.97 lakh in 2021-22.

The states can generate their demands for funds using NREGASoft, the Management Information System (MIS) of the MG-NREGS, only after this committee clears their labour budget proposals. Under the NREGS, the MoRD releases funds to states “based on agreed labour budget.”

Generally, the states’ labour budget proposals are approved by the MoRD by the end of January, before the beginning of each financial year (April-March). In West Bengal’s case, no labour budget has been approved after the financial year 2021-22, following the funding suspension.

How many dues of West Bengal are pending?

Sources in the West Bengal government say that the total dues of about Rs 18,000 crore are pending under three rural development schemes — MG-NRGES, PMAY-G and Pradhan Mantri Gram Sadak Yojana (PMGSY).

However, the Centre pegs the figure at a much lower level. Responding to a starred question asked by TMC member Jawar Sircar, Chouhan’s predecessor and then Rural Development Minister Giriraj Singh, on December 06, 2023, informed Rajya Sabha that around Rs 13,965 crore was pending as the Central share for two schemes — MG-NREGS and PMAY-G.